April 1, 2010

The Sandra Bullock Trade

For example, the relationship between happiness and income is complicated, and after a point, tenuous. It is true that poor nations become happier as they become middle-class nations. But once the basic necessities have been achieved, future income is lightly connected to well-being. Growing countries are slightly less happy than countries with slower growth rates, according to Carol Graham of the Brookings Institution and Eduardo Lora. The United States is much richer than it was 50 years ago, but this has produced no measurable increase in overall happiness. On the other hand, it has become a much more unequal country, but this inequality doesn’t seem to have reduced national happiness.

On a personal scale, winning the lottery doesn’t seem to produce lasting gains in well-being. People aren’t happiest during the years when they are winning the most promotions. Instead, people are happy in their 20’s, dip in middle age and then, on average, hit peak happiness just after retirement at age 65.

People get slightly happier as they climb the income scale, but this depends on how they experience growth. Does wealth inflame unrealistic expectations? Does it destabilize settled relationships? Or does it flow from a virtuous cycle in which an interesting job produces hard work that in turn leads to more interesting opportunities?

If the relationship between money and well-being is complicated, the correspondence between personal relationships and happiness is not. The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.

The overall impression from this research is that economic and professional success exists on the surface of life, and that they emerge out of interpersonal relationships, which are much deeper and more important.

The second impression is that most of us pay attention to the wrong things. Most people vastly overestimate the extent to which more money would improve our lives. Most schools and colleges spend too much time preparing students for careers and not enough preparing them to make social decisions. Most governments release a ton of data on economic trends but not enough on trust and other social conditions. In short, modern societies have developed vast institutions oriented around the things that are easy to count, not around the things that matter most. They have an affinity for material concerns and a primordial fear of moral and social ones.

This may be changing. There is a rash of compelling books — including “The Hidden Wealth of Nations” by David Halpern and “The Politics of Happiness” by Derek Bok — that argue that public institutions should pay attention to well-being and not just material growth narrowly conceived.

Governments keep initiating policies they think will produce prosperity, only to get sacked, time and again, from their spiritual blind side.